Print

17/07/2913 - Inflation outstrips wages

Real-term wage cuts for workers  year after year - that's the reality of Britain today We have had the longest period of real term wage cuts in 140 years. The latest inflation figures reveal another spike in prices.
.
Official statistics reveal that the retail price index hit 3.3 per cent in June, up from 3.1 per cent a month earlier.

That easily wipes out the pay rises handed to most workers in the past year and means that people actually have far less in their pockets. Paltry rises that don't match inflation or pay freezes mean wages are dropping in real terms. Wages have fallen £1,300 on average since the ConDem coalition came to power.


As thinktank the Resolution Foundation points out, earnings have now been failing to keep up with inflation for 40 straight months.
 

The Institute for Fiscal Studies in its latest research has also painted a picture of employees holding on to their jobs but continuing to accept declining real wages in exchange for not being chucked on the dole.

 

The  IFS point out, there are structural reasons for this, not least the collapse of trade union bargaining power. Many workers have decided that staying in work albeit on declining real wages is far better than trying to manage on unemployment benefit.

 

Patrick Harrington, General Secretary of Solidarity, commented: "Even with relatively low inflation wages are worth less and less. It's just another way ordinary folk are being squeezed to pay for the mistakes of the bankers and the political class. It's another reason why collective organisation and action is vital."